Mr Floppy

Ross Cameron has delighted his mates at the big end of town by signalling the Liberal government's soft turnaround on corporate governance law reform. Cameron, parliamentary secretary to the Treasurer, claimed there was no need to implement hard-line laws to protect the community against corporate corruption and suggested that the $5.3 billion HIH debacle was not an indication of a need for change. Meanwhile, advocates for stronger CLERP 9 reforms have voiced concern over revelations that executives of the top four banks will be taking home over $25 million in uncontested salaries and options this financial year.

WEEK IN REVIEW

Canberra eases up on bad boys

The Howard Government has signalled a softer stance against errant companies, with Ross Cameron, the newly appointed Peter Costello, declaring no need for an army of bureaucrats to implement unnecessary, hard-line laws.

Full story: http://www.theage.com.au/text/articles/2003/11/24/1069522536134.html

Joy questions executive pay levels

The suburban branch manager running for a position on the ANZ Board said she would bring greater scrutiny to the payment of executive salaries if elected to the Board.

Full story: http://www.labor.net.au/news/1069812503_7013.html

Auditors win time over bill

The accounting profession appears to have scored a victory over proposed laws to tighten audit independence rules - a key measure of the latest round of corporate law reform.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,7966539%255E643,00.html

Top firms warned: comply or else ...

Most top companies are still not complying with the Australian Stock Exchange's new risk management guidelines and are leaving themselves open to possible legal action and legislative intervention if they do not set up new systems.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,7987384%255E643,00.html

One.Tel bosses fail to block ASIC access to papers

The corporate regulator yesterday had an important tactical win, with the NSW Court of Appeal upholding a judge's decision that former One.Tel managing director Jodee Rich and a company executive must hand over documents and witness statements before the scheduled hearing of the civil action against them next June.

Full story: http://www.smh.com.au/articles/2003/11/26/1069825843196.html

ASIC turns up heat on 17 companies

Australia's corporate watchdog has asked 17 listed companies to explain their accounting treatment of defined-benefit superannuation plans.

Full story: http://www.theage.com.au/text/articles/2003/11/24/1069522536137.html

Coles chief forced on to back foot

Coles Myer chairman Rick Allert yesterday claimed there had been "an orchestrated campaign" to damage his reputation as a corporate director.

Full story: http://www.theage.com.au/articles/2003/11/26/1069825838300.html

Sharing blame for collapse

Outgoing Australian Magnesium Corporation chairman Roland Williams attempted to spread the blame yesterday for the collapse of the company's $1.7 billion Stanwell project - citing the banks, the engineers and its cornerstone investor as players in the disaster.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,7966435%255E643,00.html

Primelife 'inquisition'

Ousted Primelife founder and managing director Ted Sent said he was being put through a "sham Spanish inquisition" as the new guard led by Robert Champion De Crespigny and Ron Walker vowed not to take directors' fees till the nursing home group was back in the black.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,7966851%255E643,00.html

Buyer found for stricken Pan

Creditors of Pan Pharmaceuticals can look forward to a dividend in the new year, after rival Sydney contract pill maker Tabco Pty Ltd bought the business and assets yesterday.

Full story: http://www.smh.com.au/text/articles/2003/11/24/1069522541040.html

US EXCESS

Anger over network switch

Advocates of media diversity are outraged by a move that could further concentrate ownership of US television networks.

http://www.smh.com.au/articles/2003/11/26/1069825843006.html

Enron banks turned a blind eye

Three banks "aided and abetted" Enron executives in deceiving investors and regulators about the company's finances, Neal Batson, Enron's court-appointed examiner, claimed in a report released yesterday.

http://www.theaustralian.news.com.au/common/story_page/0,5744,7978807%255E643,00.html

Spitzer wields 'death penalty' in US mutual funds scandal

Eliot Spitzer obviously meant what he said last week when he warned that some financial-services companies might be shut down as part of the latest round of scandal on Wall Street.

http://www.smh.com.au/articles/2003/11/26/1069825843236.html

Mystery miner in baksheesh scandal

A mysterious Australian mining company is embroiled in an Indian political scandal replete with bundles of cash, secret videos, allegations of bribery and a ministerial resignation.

http://www.smh.com.au/text/articles/2003/11/23/1069522472927.html

NEWS HIGHLIGHT

Bosses laughing all the way

By Anthony Hughes, The Age

Executives of Australia's big-four banks might be facing a tougher operating environment, but that doesn't seem to be reflected in their salaries. Collectively they managed to extract salaries, shares and options worth around $25 million in 2002-03.

While it is becoming an increasingly complicated exercise to compare the salaries of leading bankers listed in annual reports, National Australia Bank's chief executive Frank Cicutto took the mantle as the best-paid bank executive in 2002-03 with remuneration of $7.77 million, the bank revealed yesterday.

This comprises a cash salary of $3.34 million, unvested shares and performance share rights valued at $1.84 million and "deferred performance-based remuneration" of $2.59 million.

Mr Cicutto shaded Westpac's David Morgan, who, over the same period, received $3.92 million in cash and $3.45 million in equity-based pay for a total of $7.37 million.

This year's salary disclosures from the major banks have been inflated by more comprehensive information on the value of equity-based pay under new accounting principles.

While ANZ's John McFarlane took a salary cut to take his listed total remuneration to $2.54 million, the inclusion of options and "long-term incentive amortisation" arguably lifted his 2002-03 pay to about $7 million. Likewise, the total pay for Commonwealth Bank's David Murray is listed at $2.52 million, but he's also getting 110,000 shares contingent on meeting performance targets.

Mr Cicutto's executive team was also rewarded handsomely, with wealth management boss Peter Scott receiving a total of $3.02 million, chief financial officer Richard McKinnon $2.91 million, Australian financial services boss Ian MacDonald $2.62 million, corporate and institutional banking boss Ian Scholes $2.5 million and financial services Europe general manager Ross Pinney $2.24 million.

During 2002-03, the bank issued options and performance rights to 847 employees valued at a whopping $63 million. The University of Melbourne's corporate governance expert, Ian Ramsay, said: "The dilemma we are in here is we do want, and we are getting, improved transparency as part of the push for improved governance. What that means is that we are getting disclosures of sometimes pretty complex remuneration packages." It was not clear, he said, whether companies were addressing their obligation to explain to shareholders the link between pay and performance.

SATIRE

10 more useful expressions for those HIGH STRESS days at work...

1. Stress is when you wake up screaming and realise you haven't fallen asleep yet.

2. I can't remember if I'm the good twin or the evil one.

3. I work 40 hours a week to be this poor.

4. Can I trade this job for what's behind door number two?

5. Too many freaks, not enough circuses.

6. Chaos, panic, and disorder - my work here is done.

7. Earth is full. Go home.

8. Is it time for your medication or mine?

9. Aw, did I step on your poor little bitty ego?

10. How do I set the laser printer to stun?

For further information

Contact:   Chris Owen
Email:   c.owen@labor.org.au
WWW:   www.bosswatch.labor.net.au